In mid-July 2023, Amazon published its 2022 sustainability report. It’s significant for many reasons, but for Amazon’s suppliers and the companies selling through the e-commerce giant, there’s one major thing to pay attention to: Suppliers and sellers have been put on notice—the number one online retailer will soon require companies to share their emissions data.
Starting in 2024, Amazon will update its supply chain standards “to require regular reporting and emissions goal setting.”
Why does it matter?
Amazon is following the strengthening wave of other big retailers, like Walmart, Apple, and even software companies like SAP, that already require a portion of their suppliers to share emissions. You can cite pressures from consumers or each company’s own net-zero goals. Still, it’s also likely that these major companies are trying to stay ahead of the impending SEC rule and other global regulations.
Amazon’s supply chain sustainability goals
Regarding its publicly stated goals, Amazon has two main objectives: one, it wants to use its scale to “benefit businesses that are committed to decarbonizing” and two, provide “products and tools to both track emissions and help decrease them.”
Kara Hurst, vice president and head of worldwide sustainability at Amazon, said in a recent blog, “Reaching net-zero carbon by 2040 requires Amazon to reduce its carbon footprint across our entire business, including our vast global supply chain.” Amazon will “require suppliers to share their carbon emissions data with us and set carbon goals.”
And that means more and more companies will need a plan to measure and report their emissions.
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What companies selling and supplying to Amazon will (soon) need to track and report
Suppliers will be required, upon request, to provide Amazon with a report that meets the applicable 2024 Amazon Supply Chain Standards. So whether you’re a company already selling or looking to sell on Amazon—wholesale or Fulfillment by Amazon (FBA)—or with other large retailers, here are some sustainability metrics you should be tracking to prepare for the 2024 changes.
GHG Emissions
“Suppliers should track, document and, upon request, report greenhouse gas emissions to Amazon.”
Setting reduction targets
“Suppliers are encouraged to establish a greenhouse gas reduction goal and publicly report against their progress.”
Waste
“Suppliers are required to identify, manage, and responsibly dispose of or recycle solid waste generated from operations […] We encourage Suppliers to reduce waste to landfill throughout their operations.”
What about your own suppliers?
While big retailers like Amazon want to know your emissions, it’s a good idea for you to have a handle on your own scope 3 supply chain emissions, too—they’re a part of your carbon footprint, after all.
Climate Pledge Friendly program
You may have already noticed that Amazon prioritizes its Climate Pledge Friendly listings. In fact, according to Modern Retail, “sellers say it successfully boosted the visibility of sustainably-made products.”
Sources
1. Amazon, “Building a Better Future Together: 2022 Amazon Sustainability Report,” https://sustainability.aboutamazon.com/2022-sustainability-report.pdf Accessed July 27, 2023
2. Walmart Sustainability Hub, “Project Gigaton™,” https://www.walmartsustainabilityhub.com/climate/project-gigaton Accessed July 27, 2023
3. Apple, “Supplier Responsibility,” https://www.apple.com/supplier-responsibility/ Accessed July 27, 2023
4. SAP News Center, “SAP Focuses on Key Suppliers to Reduce Carbon Emissions,” https://news.sap.com/2023/07/sap-key-suppliers-reduce-carbon-emissions/?amp=1 Accessed July 27, 2023
5. The Wall Street Journal, “SEC’s Climate-Disclosure Rule Isn’t Here, but It May as Well Be, Many Businesses Say,” https://www.wsj.com/articles/secs-climate-disclosure-rule-isnt-here-but-it-may-as-well-be-many-businesses-say-854789bd Accessed July 27, 2023
6. GreenBiz, “Get ready: Amazon will ask supply chain to report emissions starting in 2024,” https://www.greenbiz.com/article/get-ready-amazon-will-ask-supply-chain-report-emissions-starting-2024 Accessed July 27, 2023
7. Amazon, “9 takeaways from Amazon’s 2022 Sustainability Report,” https://www.aboutamazon.com/news/sustainability/amazon-sustainability-report-2022 Accessed July 27, 2023
8. Amazon, “Supply Chain Standards,” https://sustainability.aboutamazon.com/amazon_supply_chain_standards_english.pdf Accessed July 27, 2023
9. ModernRetail, “Amazon Briefing: The Climate Friendly Pledge label has become a coveted, but murky, marketing tool,” https://www.modernretail.co/technology/amazon-briefing-the-climate-friendly-pledge-label-has-become-a-coveted-but-murky-marketing-tool/ Accessed July 27, 2023
10. Amazon, “Climate Pledge Friendly Certifications,” https://www.amazon.com/b?node=21221608011 Accessed July 27, 2023
